Question

Bradley-Link's December 31, 2021, balance sheet included the following items: ($ in millions) Long-Term Liabilities 9.0% convertible bonds, callable at 104 beginning in 2022, due 2025 (net of unamortized discount of $5) [note $195 9.8% registered bonds callable at 107 beginning in 2031, due 2035 (net of unamortized discount of $1) [note 66 Shareholders' Equity Equity-stock warrants Note 8: Bonds (in part) The 9.0% bonds were issued in 2008 at 94.0 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1,000 bond is convertible into 50 shares of the Company's no par common stock. The 9.8% bonds were issued in 2012 at 105 to yield 10%. Interest is paid semiannually on June 30 and December 31. Each $1.000 bond was issued with 50 detachable stock warrants, each of which entitles the holder to purchase one share of the Company's no par common stock for $30, beginning 2022.

Answer 1

	Below Answer complete based on BOND + Equity Warrant
	Please see step by step analysis along with Journal Entries
	Long term Liability	Amnt($ Mio)
	9% convertible Bond
	callable at 104 begining at 2022	195
	due on 2025( Net of unamortized cost $5)
	9.8% registered Bond
	callable at 107 begining at 2031
	due on 2035( Net of unamortized cost $1)	66
	Shareholders Equity	6
	( Equity Stock Warrant)
	BOND note
	The 9% bond were issued in 2008 at 94 to Yield 10% Interest
	is paid semi annually on June 30 and dec 31
	Each $ 1000 bond convertible into 50 shares
	The 9.8% bond were issued in 2012 at 105 to Yield 10% Interest
	is paid semi annually on June 30 and dec 31
	Each $ 1000 bond convertible into 50 detachable stock warrant
	Holder to purchase one share of the Company's No par
	common stock for $ 30 @ opening 2022
	Journal Entries to account above Multiple Bond
	Details	Debit($Mio)	Credit($ Mio)
	Cash (96% of $ 200 Mio	188
	Discount on Bond Payable - ( balancing Number)	12
	Bond Payable ( $ 195+$5)		200
	In second case of BOND 8.8% Registered Bond
	Cash (105% of $ 67 Mio	70.35
	Discount on Bond Payable ( balancing Number)	2.65
	Bond Payable ( $ 66+$1)		67
	( Equity Stock Warrant)		6
	Third part - talking about conversion At Market price $ 37
	Bradly Link plan to converti 90%
	Bond Payable ( $ 195+$5)*90%	180
	Discount on Bond Payable -$ 5 Mio*90%		4.5
	Cash ( balancing Number)		175.5
	Balance 10% of convertible Bond
	Bond Payable ( $ 195+$5)*10%	20
	Loss due to retirement ( Balancing Number)	0.8
	Discount on Bond Payable -$ 5 Mio*10%		0.5
	Cash -104%*10%*$200		20.8
Answer 3	Assume Bradley Link induced conversion by offering $ 160
	cash for each Bond converted
	Journal entry to recorded Book Value Method
	The conversion of 90%
	Bond Payable ( $ 195+$5)*90%	180
	Conversion Expense-90% * 200000 Shares *Offer price $160	28.8
	Discount on Bond Payable -$ 5 Mio*90%		4.5
	Cash - 90% * 200000 Shares *Offer price $160		28.8
	common Stock - Balancing Number		175.5
	How to derived Number of shares
	callable at 104 begining at 2022	195
	due on 2025( Net of unamortized cost $5)
	Carrying Value $-A	19,50,00,000
	Discount on Bonds$-B	50,00,000
	Face Value of Bond$-C	1,000
	Number of BOND= (A+B)/C	2,00,000
Answer 4	Assume Bradley Link induced conversion by modifying
	the convertion ratio to exchange 55 shares for each Bond
	rather than 50 shares @ market price $37
	Again we need to calculatd Conversion Expenses
	90% * 200000 Shares *Exchange Share (55-50)*$37
	90%*200000*(55-50)*37= 33300000	33
	Bond Payable ( $ 195+$5)*90%	180
	Conversion Expense- as above	33
	Discount on Bond Payable -$ 5 Mio*90%		4.5
	common Stock - Balancing Number		209